Funds | Tue Apr 14, 2015 1:04pm EDT
WILMINGTON, Del, April 14 | By Tom Hals
(Reuters) - Texas's largest power company, the bankrupt Energy Future Holdings Corp, on Tuesday laid out a plan for cutting $42 billion in debt and said it will seek creditor and court approval by the end of the year.
The plan to end its year-old Chapter 11 bankruptcy, detailed in a court hearing on Tuesday, involves a proposed $805 settlement payment from the company's regulated power distribution business to its unregulated power generation business.
The money would provide the bulk of the repayment for junior creditors of the power generation business.
The bankruptcy proceedings have been contentious, and on Tuesday creditors took turns attacking the company's approach.
"Today is fairly remarkable. There does appear to be consensus," said Edward Weisfelner, an attorney for junior creditors. "The consensus is we all hate the plan filed."
The plan follows earlier proposals by Energy Future. The company would auction its investment in the unit that owns the non bankrupt power lines business Oncor, and spin off to senior secured creditors its unregulated Luminant generation unit and TXU retail utility.
The plan also allows the company's directors to consider alternative plans, with an emphasis on generating the maximum value for creditors, according to Energy Future's lawyers.